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  • Recent mortgage cost reduction could help you

     

     

     

    The U.S. Department of Housing and Urban Development (HUD) recently announced a quarter-percent reduction in mortgage insurance premiums on certain FHA loans. According to HUD, homeowners may save $500 per year on mortgage insurance.


    FHA loans have benefits that can include small down payment requirements and, in some cases, easier qualification. Whether you purchase or refinance, the recent reduction may help by:


    • Improving affordability
    • Allowing access to higher loan amounts
    • Offsetting the impact of recent increases in mortgage interest rates


    If you have questions about FHA loans, mortgage insurance or any other aspect of mortgage financing, I’ll be happy to help. Please call or send me an email at your convenience.

    Sincerely,
    Fred Kreger
    American Family Funding
    Certified Mortgage Consultant
    NLMS # 1850 / 214640 BRE# 01215943 / 01371184
    (661) 505-4311
    Fred.Kreger@affloans.com
    www.fredkreger.com

     

    Licensed by the Department of Business Oversight under the CRMLA.

     

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  • What is Paraskevidekatriaphobia? Find out in this week’s Markets in a Minute!

     

     

    For the Week Ending January 13, 2017

    An interesting statistic has shown up for 2016 that has caught many real estate and mortgage experts by surprise. According to the real estate website Trulia, the number of transactions failing to close after going into contract has risen sharply in many areas of the country.

     

    Trulia’s analysis has determined that property listings that moved from for-sale to pending sale, returned back to for-sale again in 2016. This is almost twice as many that occurred versus 2015. This is not focused in any particular region of the country. 96 of the nation’s 100 largest metro areas showed this trending increase. This issue is occurring in high and low priced markets, large and small markets, and affluent and poorer neighborhoods.

    For instance, in Ventura California, 11.6 percent of prospective sales failed to close. This was the highest in the country. This represents an increase of 3.1 percent from 2015. Tucson Arizona was second with 10.8 percent that failed, which is 3.5 percent higher than 2015. For perspective, the median home price in Ventura is $548,000, whereas Tucson median price is $176,000

     

    2017 appears to be starting out stronger for mortgage applications and home purchases. Now that Trump euphoria has seemed to ease, the stock market has been stable and mortgage rates have eased off their recent highs. According to the Mortgage Bankers Association of America, applications for purchases and refinances increased 6.0 percent and 4.0 percent respectively for the first week of the year.

     

    The employment sector continues to remain strong. Although last Friday’s employment report for new hiring came in at 156,000, which was below analyst’s expectations, buried within the report was the strength in wage growth. The Fed is continuing to watch what is happening with job hiring, however the increase of hourly earnings by 0.4 percent has now caught the attention of the Fed. Rapid wage growth can lead to inflation. Although the Fed wants inflation to increase, they are continuing to remain cautious in that any increase needs to be controlled.

     

    Following last week’s labor department report was the first time jobless claims data released on Thursday. Claims continue to remain very low at 247,000. Continuing claims continued to improve with a decline of 29,000.

     

    Finally, the Job Opening and Labor Turnover Survey (JOLTS) continues to show a significant gap between available job openings versus hiring. It appears that employers continue to struggle to fill open positions as the number of new hires is far below the number of available positions.

     

    Next week’s many potential market moving reports are:

    • Monday January 16th – Martin Luther King Holiday – All Markets Closed
    • Wednesday January 18th – MBA Applications, Consumer Price Index, House Price Index, Consumer Price Index, and Industrial Production
    • Thursday January 19th – First Time Jobless Claims and Housing Starts

     

    As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can

     

    Please enjoy this quick update on what happened this week in the housing and financial markets.

     

     

    Wholesale inventories rose in November, slightly more than previously reported. The increase was the largest gain in 2 years and supports economic growth.
    Rising wages and expected tax cuts are expected to boost consumer spending and support economic growth through much of this year.
    A tighter labor market and anticipated improvements are expected to stoke inflation. Inflation could contribute to rising rates through 2017.

     

    Purchase mortgage applications were up 6% for the week as buyers head back to the housing market after the holidays. It also helps that rates have improved.
    According to CoreLogic, foreclosures are approaching pre-crisis levels. November foreclosures numbered 26,000, down from 35,000 in November 2015.
    In an NAHB survey, 70% of homebuyers preferred an open floor plan home. Builders are delivering, with 84% reporting the use of open or partially open plans. 

    Paraskevidekatriaphobia (fear of Friday the 13th) Fun Facts

     

    1. 90% of US skyscrapers do away with floor number 13, according to reports by the Otis Elevator Company, the world’s largest elevator manufacturers.

     

    2. The 32nd President of the United States, Franklin Roosevelt, never travelled on a 13th and refused to have a meal with 13 people at the table.

     

    3. The deadliest associations with number 13 are the facts that there are 13 stairs leading to the gallows; the blade in a guillotine fell from a height of 13 feet; and a hangman has 13 knots in a hangman’s noose.

     

     

    Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

     

    Sincerely,
    Fred Kreger
    American Family Funding
    Certified Mortgage Consultant
    NLMS # 1850 / 214640 BRE# 01215943 / 01371184
    (661) 505-4311
    Fred.Kreger@affloans.com
    www.fredkreger.com

    Licensed by the Department of Business Oversight under the CRMLA.

     

     

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  • A quiet end to 2016 in this week’s Markets in a Minute!

     

     

    For the Week Ending December 30, 2016

    As expected, the markets are quiet this holiday week. Trading volume is light, and the indices have remained within a narrow range. Enjoy the calm, because it is likely that the markets will become more volatile as information regarding President Elect Trump’s governing intentions are released. (This is not a political statement). With the change from a Democratic governing body to now a controlling Republican Party, there will likely be many significant changes to government policy therefore creating economic uncertainty.

     

    Despite the minimal trading activity this week, there were significant housing reports released that provided fuel for housing speculation for 2017. The S&P Case-Shiller Home Price Index showed that price appreciation is not booming, but it continues to remain steady. For the month of October prices increased 0.6 percent in the 20 major cities measured. The increase was in-line with analyst’s expectations and there were no surprises in the report.

     

    The East coast cities saw improvement in appreciation after having been somewhat stagnant for the better part of 2016. The Pacific Northwest continues to dominate price increases with Seattle home prices rising a total of 10.7 percent from the same time last year. Portland Oregon was second with a 10.3 percent gain. Moving East, Denver Colorado came in third with year-on-year appreciation of 8.3 percent.

    The housing market is beginning to feel the effect of the rise in mortgage rates. The Pending Home Sales Index declined by 2.5 percent in November. A healthy rise in this index was expected and the reversal from the recent upward trend caught most experts by surprise. The area hit hardest was the west coast. In addition to rising rates impacting home sales, limited inventory continues to play its part in the challenge to housing as well.

     

    What will hopefully add strength to the housing market in 2017 is the rapid rise of consumer confidence. Since the election, confidence has been getting stronger and stronger. The confidence index is up 12.9 points since the election. An increase of this pace is virtually unheard of. The level of 113.7 is the highest measurement of consumer confidence since August 2001.

     

    First time jobless claims declined from their recent increase. This is not un-common for this time of year. Claims for the week ending December 24th were reported at 265,000. This is far below 300,000 where employment concerns tend to increase.

    Next week business returns to normal as the holiday season comes to an end. There are a number of potential market moving reports this coming week:

     

    • Monday January 2nd – All Markets Closed
    • Tuesday January 3rd – ISM Manufacturing Index & Construction Spending
    • Wednesday January 4th – MBA Applications & ADP Employment Report
    • Thursday January 5th – First Time Jobless Claims
    • Friday January 6th – National Employment Situation

     

    As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can.

     

    Please enjoy this quick update on what happened this week in the housing and financial markets.

     

     

    The markets are quiet this week as traders take the rest of the year off. Very little economic news for the week as the year winds down.

     

    The rise in oil prices stalled as U.S. inventories were higher than expected. Increasing oil prices could fuel inflation, which helps drive up interest rates.

     

    The labor market appears to be near full strength as jobless claims came in lower than expected. This is the 95th straight week claims were below 300,000.

     

    Home prices hit a new high in October, up 5.6% year-over-year. The housing market is supported by strong employment and high consumer confidence.

     

    Pending home sales were down slightly in November. The drop was blamed on tight inventory and the brisk upswing in mortgage rates.

     

    However, a recent Redfin survey shows recent increases in mortgage rates aren’t scaring away buyers. Only 2.6% had decided to postpone their search.

    An optimist stays up until midnight to see the new year in. A pessimist stays up to make sure the old year leaves.

     

    Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

    Sincerely,
    Fred Kreger
    American Family Funding
    Certified Mortgage Consultant
    NLMS # 1850 / 214640 BRE# 01215943 / 01371184
    (661) 505-4311
    Fred.Kreger@affloans.com
    www.fredkreger.com

     

    Licensed by the Department of Business Oversight under the CRMLA.

     

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  • Housing shrugs off higher rates in this week’s Markets in a Minute!

     

     

    For the Week Ending December 23, 2016

    The holiday season is in full swing and investors are sticking to the sidelines. Trading volume remains low and the indices are trading within a narrow range. Non-stop peculation continues relating to what 2017 will bring for the economy and President Elect Trump’s policies. Only time will tell.

     

    The report on existing homes sales for the month of November is better than analysts were expecting. Sales jumped 0.7 percent to an annualized rate of 5.610 million. This is a nice increase from October’s pace of 5.570 million. Resales of single family homes declined by 0.4 percent but the pace is still the second highest on record. Condominium resales jumped 10.0 percent which is a surprising and strong turnaround for the sector. Overall sales of existing homes are 15.4 percent higher than the same time last year.

     

    Home prices are rising at a slower pace than in previous months. For the month of October prices increased 0.4 percent according to the Federal Housing Finance Agency. The prior two months recorded increases of 0.6 and 0.7 percent. The strongest part of the report is that prices are 6.2 percent higher than the same time last year. This is the 3rd straight month of plus 6.0 percent values over last year’s numbers.

    In a surprise reversal, applications for mortgage loans increased 3.0 percent for both purchases and refinances. It appears that consumers are accepting the reality that mortgage rates will likely remain where they are, or even increase further, so they want to take advantage of them now before the cost of financing likely increases further in 2017.

     

    First time jobless claims unexpectedly increased last week up to 275,000. After the recent employment data has been sitting with claims hovering around the 250,000 mark, the latest increase seemed to catch most experts by surprise. Given that there appears to be more jobs available than people to fill them, it seems a little odd that layoffs may be increasing. Since there are no special circumstances reported that can be attributed to the increase, it raises a question if the next employment report due out on Friday January 8th will keep the trend of positive reports going?

     

    Finishing out this week’s economic reports, the 3rd quarter GDP data lived up to expectations that it would show the economy continues to have strength. With an adjustment for inflation, the latest report showed an increase of 3.5 percent beating analyst’s expectations. This is the strongest report in the last two years and the trend of continued improvement is likely to continue well into the first quarter of 2017.

    Expect the markets to remain quiet now through the remainder of the holiday season.

     

    Next week’s potential market moving reports are:

    • Monday December 26th – All Markets Closed
    • Tuesday December 27th – Case-Shiller HPI & Consumer Confidence
    • Wednesday December 28th – MBA Applications & Pending Home Sales
    • Thursday December 22nd – First Time Jobless Claims

     

    As your mortgage and real estate professional, I am happy to assist you with any information you may need regarding mortgage or real estate trends. I welcome the opportunity to serve you in any way I possibly can.

     

    Please enjoy this quick update on what happened this week in the housing and financial markets.

     

     

    The third quarter showed strong economic growth and an increased GDP. As the economy continues to heat up, interest rates will be pressured to rise.

     

    Jobless claims were slightly higher this week than expected, but still below 300,000. The strong labor market could contribute to higher rates in 2017.

     

    Trading volumes are down as traders take off for the holidays, which could cause volatility. Markets will be closed or close early 4 of the next 7 trading days.

     

    Rising mortgage rates haven’t slowed down the market, as purchase applications were up 1% over 2015. Demand for housing remains strong, regardless of rates. 

     

    Existing home sales climbed in November to the highest level since early 2007. Sales increased 18.2% over November 2015 (the implementation of TRID).

     

    FHFA’s Housing Price Index showed prices moderating slightly in October, but still rising. Prices were 6% higher than the previous year.

    ‘Twas the night before Christmas and all through the house, not a creature was stirring, not even a mouse. The stockings were hung by the chimney with care, they’d been worn all week and needed the air.

     

    Rate movements and volatility are based on published, aggregate national averages and measured from the previous to the most recent midweek daily reporting period. These rate trends can differ from our own and are subject to change at any time.

    Sincerely,
    Fred Kreger
    American Family Funding
    Certified Mortgage Consultant
    NLMS # 1850 / 214640 BRE# 01215943 / 01371184
    (661) 505-4311
    Fred.Kreger@affloans.com
    www.fredkreger.com

    Licensed by the Department of Business Oversight under the CRMLA.

     

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  • Home Appraising in 2016 – Elephant in the Room

    I am writing this article on my way back from Washington State and their association’s annual conference. What a great host WAMP was to me and John Stevens.   One of the topics that I had the pleasure of  hosting, was a panel and round table discussion on our industry problems with current residential appraisals.  I thought I was going to be  dodging bullets and taking on this issue in hopes of making changes for the better. But surprising enough a great dialog ensued and we had some great ideas spin off of that meeting with loan officers and wholesale lenders.   Our industry as a whole is being affected and worse is our consumers are being stuck with moving trucks unable to move into their new homes.

     

    At NAMB National in Las Vegas, we held a Wholesale Lender Summit in which we mostly spent our time discussing our industries ever escalating issues with appraisals and the appraisers themselves.   NAMB assembled a panel to open up the discussion. Two panelists were from Appraisal Management Companies (AMCS) and we had the Director of Appraisal Issues, John Brenan from The Appraisal Foundation, which is authorized by Congress as the source of appraisal standards and appraisal qualifications.

     

    If we were going to make some progress as an industry it had to start with the stakeholders.  Not only did we have some great appraisal panelist but we had the wholesale lender leadership to make some changes that affect all of us.

     

    This is where we compare the Marathon versus the Sprint.

     

    Our Marathon solution came at the Appraisal Qualifications Board (AQB) recommendations on the changing of current qualifications for certified appraisers.  They are currently accepting comments from industry through November 5, 2016 at www.appraisalfoundation.org

     

    The AQB wants to create lternative Track to obtaining a credential. They have Proposed College-Level Education changes for  Licensed Residential Credential by Removing requirements for 30 semester credit hours of college-level education.

     

    They have alsol proposed College-Level Education Changes by revising the bachelor’s degree requirement and require Associate’s degree. Some of the alternatives couel be completing a 21 semester credit hours of specific college lever programs.  Also adding a provision to reduce the hours of experience.

     

     

    Now coming to the Sprint to help the current state of affairs, where our lender partners need to come into the short term solution function.  How do we as an industry account for valuing those assets and offer the protection of all investors?  Some recommendations have been for Fannie to allow for appraisal waivers on certain transactions similar to what we had some years back.  But the investors would have to agree to that “Overlay” as an acceptable loan package.

     

    To bring more credibility to my them, according to the latest STRATMOR Spotlight survey on the Appraisal Process and Turn Times, appraisal turn times since TRID came into effect in October of last year have increased 5.7 days for purchase loans and 6.3 for refinances. These increases represent increases of 81% and 79% respectively over pre-TRID turn-times. Whether these increases are due to TRID or the increased volumes in 2016 coupled with shortages of qualified appraisers is unclear. Whatever the root cause, lenders are now adding additional days in process to an already tight closing timeline.

     

    I know that sometime a history lesson is needed to answer the question;  How did we get here? Congress  created the Financial Institutions Reform, Recovery, and Enforcement Act and spawned The Appraisal Foundation,, and its work is carried out by the Appraisal Subcommittee..

     

    The Appraisal Foundation has two boards: the Appraisal Standards Board (ASB) and the Appraisal Qualifications Board (AQB). The ASB sets the standards for acceptable appraisal practices and the AQB sets the qualifications for licensed and certified appraisers. And each of the 50 states regulates its own appraisers, using guidance provided by the ASB and AQB.

     

    The AQB set the current standards a needing a four-year degree, passing an exam, and an internship of 2,500-3,000 hours. And since the passage of then The Home Valuation Code of Conduct (HVCC), most lenders have moved to the Appraisal Management Company (AMC) model, which is overseen by the CFPB. Most appraisers today work for AMCs.

     

    In presentation by the Appraisal Foundation , we see them requesting comments www.appraisalfoundation.org of  lowering or changing the barriers to entry.

     

    This commentary has discussed the declining number of appraisers. There are reportedly less than 80,000, and it is not currently heading higher. The number has declined, per the Appraisal Institute, by 20% between 2007 and 2015. What if it drops another 20% in the next 10 years? Like real estate agents, loan officers, and whoever, the average age of an appraiser is supposedly in their 50s. Will those retiring be replaced by Millennials? Good question. What kid comes out of 17 years of school, wanting to be an apprentice for another year, and taking more tests? And what appraiser wants to be liable for their work, taking the time to review it in addition to doing their own?

     

    And remember, we have appraisals to the the expert eyes of collateral for investors. They rely on residential real estate appraisals for gathering and interpreting information used for valuation of the subject property. A real estate appraisal is complex  and includes information from public records along with diagrams and photos provided by the appraiser, who inspects the interior and exterior of the property. An appraisal includes three comparable properties used for demonstrating values in the immediate area and for supporting the valuation of the subject property. They contain notes about a property’s age, architectural features, condition and necessary repairs.

     

    A residential real estate appraisal includes specific descriptions of the property and its surrounding area. Neighborhood amenities, current and planned development, legal proceedings, and other factors potentially impacting the value of the property are noted in the appraisal and factored into the property’s appraised value. An appraiser researches public records and recent home sales for preparing an appraisal. Any entity in the secondary markets wants to ensure that the loan-to-value is correct.

     

    I will will have more resources and solutions in the coming months as I travel to the different states and continue my dialog with lenders, appraisers and loan originators.

    Thank you and Namaste’

    Fred Kreger is the Vice President of Enterprise Retail Production at American Pacific Mortgage.  He is currently the President for NAMB, the Association of Mortgage Professionals and a Past President for the California Association of Mortgage Professionals (CAMP) and He can be contacted at fred.kreger@apmortgage.com or (661) 400-8905.

     

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